The Moors murderer Ian Brady should stay at Ashworth secure mental hospital in Merseyside where he has been held since 1985, a mental health tribunal has ruled .

The 75-year-old argued that he was not suffering from paranoid schizophrenia and had never been mentally ill since he was jailed for life in 1966. He claimed he was sectioned only after pretending to be psychotic, believing life would be better in hospital than in jail. However, the judge-led panel disagreed.

"The tribunal has concluded that Mr Ian Stewart Brady continues to suffer from a mental disorder which is of a nature and degree which makes it appropriate for him to continue to receive medical treatment and that it is necessary for his health and safety and for the protection of other persons that he should receive such treatment in hospital and that appropriate medical treatment is available for him," said Judge Robert Atherton.

The reasons for the tribunal's decision will be released later. Brady, whose legal costs are estimated at around £250,000 and paid through legal aid, can challenge the decision, which would require a further hearing at an upper tribunal.

Brady told the tribunal that he had tricked some of the country's most eminent psychiatrists by following Stanislavski's method acting techniques for 18 months after observing mentally ill inmates while working as a cleaner in Wormwood Scrubs jail in the 1970s. For at least the past decade, Brady has been trying to secure his transfer from Ashworth. He says he has been on hunger strike for the past 14 years, though his barrister admitted that he ate toast and soup every day.

Brady said he accepted that he would never be released but wanted to be back in jail. Giving evidence to the tribunal, he waxed lyrical about the "good old days" in prison where he said he had studied German and psychology and mingled with spies and the Great Train Robbers.

He applied to be transferred to prison, where he said he would have more "freedom of control" over his life. His legal team called three independent mental health experts, all of whom said that while Brady had a narcissistic, paranoid and antisocial personality disorder, he no longer showed signs of being schizophrenic or psychotic. Doctors from Ashworth told the tribunal that Brady was too unwell to leave hospital.

Eleanor Grey, QC, said: "We say this has been a long-standing chronic illness with prognostic implications, that the nature of the case of untreated schizophrenia is that it does not vanish. Plainly it must be beyond doubt that Mr Brady holds false and fixed beliefs … beliefs that are on the delusional end of the spectrum."

She said there was overwhelming evidence that he suffered from an antisocial and narcissistic personality disorder, but that the scale of his paranoia was "grossly in excess" of the paranoid traits of the same disorder. "I suggest that the paranoia is a major driver, at least, in his current presentation and continues to be disabling." "We suggest that there has been a real measure of acceptance by the experts called by the patient that the hospital has had a beneficial effects on the symptoms of the personality disorder and the mental illness. We say that the relative stability of the condition means that the very careful management he has received has served to prevent a deterioration and relapse."

Grey said there was a real risk to Brady's health if he continued on hunger strike in jail; he could relapse quickly to the psychotic levels he displayed in the 1980s. She said Brady had failed to explain why he wanted to return to prison six times on Thursday. "He could not come up with a cogent account," she said.

Brady and his partner, Myra Hindley, were convicted of luring children and teenagers to their deaths: they were sexually tortured before being buried on Saddleworth moor in the Peak District.

Pauline Reade, 16, disappeared on her way to a disco on 12 July 1963; John Kilbride, 12, was snatched in November the same year. Keith Bennett, 12, was taken on 16 June 1964 after he left home to visit his grandmother; Lesley Ann Downey, 10, was lured away from a funfair on Boxing Day 1964; and Edward Evans, 17, was killed in October 1965.

Brady was given whole life sentences in 1966 for the murders of John, Lesley Ann and Edward. Hindley was convicted of killing Lesley Ann and Edward and shielding Brady after John's murder. She was also jailed for life.

Both later confessed to the murders of Pauline, whose body was found in 1987, and Keith, whose body has never been found. During the tribunal, Brady claimed that the murders were "existential exercises" and "recreational". Hindley died in hospital, still a prisoner, in November 2002 at the age of 60.

Alan Bennett, Keith Bennett's younger brother, watched the tribunal in full, via a video link. He said Brady's desire for a public hearing "was nothing more than a point-scoring exercise against Ashworth, as his actions in Ashworth seem to be". He said Brady had been exposed as "a self-pitying liar".

Bennett, who runs the website Searching for Keith, has long campaigned for Brady to reveal his brother's burial site. He said he was glad Brady would stay at Ashworth for the foreseeable future.

"I am happiest knowing Brady will be at his unhappiest," he said. "I know he hates Ashworth and I cannot be sure he would feel the same about any other place he may be sent to. Besides that, I do not think Brady should be allowed to move just because he wants to."

The tribunal's decision was welcomed by John Kilbride's brother, Terry. "[Brady] should stay where he is, that's my honest opinion on it," he said. "I don't believe he's going to kill himself, that's just a ploy, just another wind-up." Keith Bennett's mother, Winnie Johnson, died last August aged 78 after making repeated pleas for Brady to reveal the location of his grave.

Her solicitor, John Ainley, said she would have been "stressed and angry" at Brady's references to his murders as "recreational" and an "existential experience" during the eight-day hearing but would have been satisfied with the ruling.

"She always felt that Ian Brady did not give the children any choice and consequently he should not have the choice to leave the hospital environment."

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